Parts produced in lots
1200
600
42000
304
50
15200
Assembled component worth cost/unit total cost avg. lead time annual demand businees weeks
2 30 40 70 4 3800 50
Distribution centers modem price
5 320
Pipeline inventory 195
$pipeline inventory 62400
Avg. cycle inventory 200
Safety inventory 195
Total inventory 2950
demand at each distribution Avg. shipment size avg. lead time for delivery cariies week supply
65 400 3 3
lots unit raw material cost value added in mf. Unit
150 140 1
Avg. cycle inventory 75
$ value of inventory 33000
avg. demand /week 84
Pipeline inventory 252
Cost of pipeline invento 290
$ of pipeline inventory 73080
value added price total cost lead time annual demand weeks per year
300 440 3 4200 50
Demand of paper carton
160
Before
After change
Savings
$/carton Inbound shipment from vendor avg. lead time opeartes per year carries supply
25 1150 2 52 3
avg. cycle inventory 575
safety stock 480
Pipeline inventory 320
Average aggregate inve 1375
Aggregate inventory va 34375
avg. cycle inventory 225
Safety stock 160
Pipeline inventory 160
Average aggregate inve 545
Aggregate inventory va 13625
Vendor1 Vendor2
Average aggregate inve 1375 545 830
Aggregate inventory va 34375 13625 20750
reduce lead time week reduce shipment of cartons reduce safety stock
1 450 1
40000 13000000
a 8000 10400000
b 12000 1950000
c 20000 650000
SKU Code Unit Value Demand (units) Dollar
X104 $2.40 2,600 $6,240.00
A104 $0.35 1,030 $360.50
U404 $0.84 360 $302.40
L205 $4.30 60 $258.00
D205 $4.75 25 $118.75
L104 $0.02 4,500 $90.00
X205 $2.50 35 $87.50
S104 $0.27 250 $67.50
Total 7525
a a b b c c
0.2 0.8 0.3 0.15 0.5 0.05
1 82.93 82.93
2 4.79 87.72
3 4.02 91.74
4 3.43 95.17
5 1.58 96.74
6 1.20 97.94
7 1.16 99.10
8 0.90 100.00
pounds rolls cost/roll annual holding cost
1500 2250 875 16
a 42
b 5.1
each order cost Assume 200 work days
55 275
405 15 0.35
a 645.4234
b 1.593638
demand/year replenish stock price holding cost
20400 75 3
a 1009.95049384
b 20.1990098767
c 16.0898975734
d 125.538461538
e 125.538461538
f 1135.48895537
days working days
2 325